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IT'S full steam ahead for the reduction of energy consumption in the Harwood sugar mill.

Thanks to a successful application for a grant under the Federal Government - Clean Technology Food and Foundries Investment Program, the NSW Sugar Milling Co-Operative will be installing an economiser on the mill's boiler to transfer energy from the exhaust gases to boiler feedwater.

"This will mean more efficiency and using less fuel," NSW Sugar CEO Chris Connors said.

"That makes this a good project.

"At a cost of $3m the government has contributed approximately $1m."

Mr Connors said the project was set to be completed within nine months.

"It should be ready for the 2014 season," he said.

The economiser transfers energy from the gases to the boiler feedwater, heating the feedwater from 105C to around 160C, improving thermal efficiency and reducing energy consumption.

"The Co-Operative appreciated the support of the government with the project and it was very much a win-win for all involved," Mr Connors said.

"It will provide great energy savings and a reduction in the release of carbon."

After one of the lowest harvests on record in 2012 Mr Connors said the 2013 season was looking much better.

"We will get overall recovery in the following season as well," he said.